Last week Trico, which only relisted in 2005 after undergoing a restructuring, announced the acquisition of 51.5% of Oslo listed DeepOcean and the intent to offer NOK32 per share for all remaining shares, valuing the company at $810 million. The offer price represents a 28% premium to DeepOcean’s May 15 closing price of NOK 25 per share, an amount that can be taken as a sign of strong interest by Trico in making a complete acquisition. Correspondingly DeepOcean’s management and board have recommended the offer to their shareholders.
Continue Reading
While shipping stocks are no longer booming, the underlying shipping markets remain healthy. Jonathan Chappell and his team at JP Morgan are looking for near-record tanker rates at the end of 2007 to drive up 1Q08 EPS for tanker stocks and also believe that the tanker spot markets will hold up better than expected going forward. On the dry side, Urs Dür at Lazard sent out a note this week to correct common investor misunderstandings regarding the BDI, noting that it is not correlated to near-term world trade. He also expects Chinese iron ore price negotiations to be completed by March 2008, which combined with low inventories in China should lead to near-term improvements for dry bulk freight rates. Omar Nokta and his team at Dahlman Rose note that the tanker market could see some support as AG March cargoes come into the market this week while also observing that the dry bulk market has gained some positive momentum, though this has yet to be reflected in stock prices.
Continue Reading
Written by:
carisk | Categories:
Freshly Minted,
The Week in Review | February 14th, 2008 |
Add a Comment
Some people are better than others at sharing, and TORM seems to be right at the top of the list. After purchasing OMI jointly with Teekay this past spring and splitting the assets, TORM announced this week that it had acquired a 50% equity stake in FR8 from Projector for $125 million. The FR8 Group controls 25 vessels including three LR2 newbuildings for delivery in 2008. It owns six modern product tankers, comprising four MR and two LR1 vessels and has long-term charters on three LR2, four LR1 and 11 MR product tankers, with purchase options on three of these vessels. The group also commercially manages one LR2 vessel and has about 30 staff worldwide in Singapore, London and Veracruz. The full fleet list is shown on the next page.
Continue Reading
Written by:
carisk | Categories:
Freshly Minted,
The Week in Review | January 24th, 2008 |
Add a Comment
Shipowners Present at Deutsche Small Cap Equity Conference
It’s no coincidence that investor conferences are being held in closer to the equator during these chilly months. This week, Deutsche Bank, which recently hired investment banker Craig Fuehrer from JP Morgan and veteran transportation analyst Jordan Alliger from Lazard (formerly with Goldman Sachs), held an event at the Ritz Carlton on the beach in Naples, Florida. Shipping companies that presented include: Kirby Corporation (NYSE: KEX), OMI (NYSE: OMM), General Maritime (NYSE: GMR), TEN (NYSE: TNP), Stolt Nielsen, S.A. (NASDAQ: SNSA) and Maritrans (NYSE: TUG). As you can see from the share price graphs for the last five days, with fundamentals as good as the shipping industry, it’s always a good idea for companies to get out on the road and tell their story to investors.
It’s no coincidence that investor conferences are being held in closer to the equator during these chilly months. This week, Deutsche Bank, which recently hired investment banker Craig Fuehrer from JP Morgan and veteran transportation analyst Jordan Alliger from Lazard (formerly with Goldman Sachs), held an event at the Ritz Carlton on the beach in Naples, Florida. Shipping companies that presented include: Kirby Corporation (NYSE: KEX), OMI (NYSE: OMM), General Maritime (NYSE: GMR), TEN (NYSE: TNP), Stolt Nielsen, S.A. (NASDAQ: SNSA) and Maritrans (NYSE: TUG). As you can see from the share price graphs for the last five days, with fundamentals as good as the shipping industry, it’s always a good idea for companies to get out on the road and tell their story to investors.
Written by:
carisk | Categories:
Forums,
Freshly Minted | February 17th, 2005 |
Add a Comment
With Trøim at Carnivale in Rio, Shipping Deals Slow Down
Navios Selling, Selling Navios
There’s been a lot of buzz in the ship finance world this week about Lazard’s auction of Connecticut-based Navios Corporation. For those that missed it, Navios major shareholders, which are comprised of the company’s management, the Leventis Group of Greece and Saltchuk of Seattle, together hired investment bank Lazard Freres to sell the asset-light dry bulk owner operator a few months ago, and as bids came in late last week the market was aflutter with speculation and excitement.
Many of the shipping investment banks were representing bidders on the deal, which saw valuations range from $450 million to over $550 million. The deal also piqued the interest of many of the dominant consolidators and traders like OMI, Restis and Fredriksen, along with Goldman Sachs and George Economou‘s recent, oversubscribed and cash-laden DryShips. As we go to press tonight, blank check company International Shipping Enterprises announced that, “following a competitive bidding process, it executed an agreement providing for an exclusive period to negotiate definitive documentation to acquire all of the shares of Navios.”
For those who don’t know the company, Navios was founded 50 years ago as the shipping subsidiary of United States Steel Corporation, and today the fleet is comprised of 28 panamax and handymax vessels. We don’t have the offering memo on this deal, so we won’t even play around with a valuation because it’s impossible to do with any accuracy. Here’s why: of the company’s 28 vessels, the 6 ultra handymaxes are owned, and of the 22 long-term time chartered vessels, 15 are currently in operation and the remaining seven are scheduled for delivery at various times over the next two years. Moreover, Navios has options to acquire 13 of the time-chartered vessels. Further, we suspect that the owned vessels have a substantial net asset value and historically the vessels controlled under the largely Japanese charters-in have low daily rates and cheap purchase options. If that weren’t enough of a rat’s nest for valuation, Navios generates loads of money trading ships and FFAs and owns and operates a bulk terminal in Uruguay to boot. That’s why we won’t touch it.
We will say, however, that we always find it fascinating when asset-light shipping companies, whether they are traders or non-owning pools, solicit a valuation for their businesses. We say fascinating because historically shipping companies have had a hard time proving worth beyond steel irrespective of the talents of their management or sophistication of their software. That said, there have been some success stories, the best of which is Noble Group, which has a $3 billion market capitalization on the Singapore Stock Exchange. PacBasin also got some credit for its management. Noble, like Navios, owns few ships but instead make their money trading commodities.
Until we have more information, all we will say is this: if any asset-light shipping company could break ground in gaining a high valuation, it is Navios and it is now. The company has an incredibly good reputation and has developed what we understand to be highly efficient freight forecasting models – which begs another question: why are they selling?
Navios Selling, Selling Navios
There’s been a lot of buzz in the ship finance world this week about Lazard’s auction of Connecticut-based Navios Corporation. For those that missed it, Navios major shareholders, which are comprised of the company’s management, the Leventis Group of Greece and Saltchuk of Seattle, together hired investment bank Lazard Freres to sell the asset-light dry bulk owner operator a few months ago, and as bids came in late last week the market was aflutter with speculation and excitement.
Many of the shipping investment banks were representing bidders on the deal, which saw valuations range from $450 million to over $550 million. The deal also piqued the interest of many of the dominant consolidators and traders like OMI, Restis and Fredriksen, along with Goldman Sachs and George Economou‘s recent, oversubscribed and cash-laden DryShips. As we go to press tonight, blank check company International Shipping Enterprises announced that, “following a competitive bidding process, it executed an agreement providing for an exclusive period to negotiate definitive documentation to acquire all of the shares of Navios.”
For those who don’t know the company, Navios was founded 50 years ago as the shipping subsidiary of United States Steel Corporation, and today the fleet is comprised of 28 panamax and handymax vessels. We don’t have the offering memo on this deal, so we won’t even play around with a valuation because it’s impossible to do with any accuracy. Here’s why: of the company’s 28 vessels, the 6 ultra handymaxes are owned, and of the 22 long-term time chartered vessels, 15 are currently in operation and the remaining seven are scheduled for delivery at various times over the next two years. Moreover, Navios has options to acquire 13 of the time-chartered vessels. Further, we suspect that the owned vessels have a substantial net asset value and historically the vessels controlled under the largely Japanese charters-in have low daily rates and cheap purchase options. If that weren’t enough of a rat’s nest for valuation, Navios generates loads of money trading ships and FFAs and owns and operates a bulk terminal in Uruguay to boot. That’s why we won’t touch it.
We will say, however, that we always find it fascinating when asset-light shipping companies, whether they are traders or non-owning pools, solicit a valuation for their businesses. We say fascinating because historically shipping companies have had a hard time proving worth beyond steel irrespective of the talents of their management or sophistication of their software. That said, there have been some success stories, the best of which is Noble Group, which has a $3 billion market capitalization on the Singapore Stock Exchange. PacBasin also got some credit for its management. Noble, like Navios, owns few ships but instead make their money trading commodities.
Until we have more information, all we will say is this: if any asset-light shipping company could break ground in gaining a high valuation, it is Navios and it is now. The company has an incredibly good reputation and has developed what we understand to be highly efficient freight forecasting models – which begs another question: why are they selling?
